Like clockwork (the third Thursday of each month except for the beginning of the year during “benchmarking season”), the New York City job numbers are released.
Also like clockwork, I peruse and decipher these numbers to see what they might say about the general health of the local economy and, more specifically, the health of the NYC office market. I’ve written columns about the local job market before, and I’m about to do it again.
But this time, I thought I’d take a different angle and look back in our past and compare office job growth to overall private sector job growth. Wow, are those crickets I hear? Did everyone just nod off? O.K., perhaps you don’t think it’s the sexiest topic in the news (I beg to differ); nonetheless, it is a very important one. So off we go.
To begin, let’s look at the most recent data—July. For the fifth straight month (and six out of seven for the year), private sector jobs climbed in NYC with the figure up by a very healthy 15,200 positions for the month. Leisure and hospitality was at the top of the class, up by 7,300 positions, followed by trade, transportation and utilities up by 5,800 and education up by 4,500. Almost all categories on the office side of the ledger were sluggish at best save for my favorite industry, real estate, which climbed by 2,400 positions.
Now for a longer-term view, we’ll look all the way back to 1991. That’s when the current (more detailed) method of data tracking began for NYC proper. This makes it rather easy to compare year-over-year data for our own market as well as the U.S. at large. Getting excited now? I think I may need a blackboard at this point—or bullet points, yes?
- Year to date, office jobs as a percentage of total private sector jobs was a moribund 11.2 percent.
- If we take a look at all the positive job growth years from 1991 to 2012 (that’s 15 out of 22 years), the average percentage of office jobs to total private sector jobs created has been 43.4 percent.
- Even in the very recent past (2010-2012) the figure has ranged from 33.5 percent to 44.1 percent.
- Certainly, sectors like leisure and hospitality are growing at a faster clip, but that does not negate the fact that the office sectors’ growth has diminished.
- To see if this anomaly extends beyond NYC, I looked at the national numbers, but all appears pretty much in order there with office jobs as a percentage of total private sector jobs coming in at 39.1 percent year-to-date 2013.
There are, of course, issues with comparing the first seven months of a year with full years (all data used has been seasonally adjusted). But even comparing the first seven months of previous years shows a distinct drop-off in NYC office jobs for 2013.
Now, this all could be worked out when jobs are benchmarked in the first quarter of 2014 or even sooner. In any case, the research team at NGKF will continue to closely monitor the situation.